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Not Blue Oceans, Blue Planets!

Here’s what I have to look at every morning.

Two of my little books (Culture and Consumption I & II) are struggling to climb the ladder. Today, they are doing relatively well, their ranking marked in 5 digits. (I won’t tell you the number of times I find them ranked in the deep 6 digits. 400,000 is not uncommon.)

But every morning, Blue Ocean Strategy, the book by Kim and Mauborgne, is right up there. IN TWO DIGITS. I don’t begrudge them this success. Yes, I do.

Kim and Mauborgne say that companies should forsake the roller derby in which companies fight for tiny, and brief, moments of advantage. No, they say, strike out on your own. Look for blue oceans that are presently unoccupied, markets you can have all to your own.

The good thing about this book is the fact that it tells us how much marketing has become a game of ideas, imagination and innovation. Indeed, it is increasingly a game in which advantage goes to those who can step out of received wisdom and current assumptions, and see the world new. This is great news for the likes of me and you (dear reader). After all, we are the people who live for (and through) our wits. An intellectually vital market place is good (and billable) news.

The bad thing about the book is that the book is naive. Only academics could have written such a thing. Blue Ocean Strategy acts as if "wishing makes it so," all we have to do is to find an uncontested market space and all the hard work of marketing just goes away. Hurray!

If only it were so. If only we could just wish away the competition and the close quarter combat that characterizes every mature market. Yes, General Motors created a blue ocean when it was prepared to customize in a way that Ford would not. Yes, Dell created a blue ocean by disintermediating the marketplace. Yes, the megaplex changed the movie house. Yes, Cirque reinvented the circus. And, er, that’s pretty much it.

This kind of good fortune happens to a handful of companies. (This is, not incidentally, the reason the book is so thin on examples, and why several of them seemed forced.) To mix my metaphors, people find blue oceans about as often as they are struck by lightening. (Yes, there is an evolutionary joke lurking in there somewhere.)

To make this the strategy for everyone to follow…well, it’s just nuts. It’s like telling every baseball team that, if they want to win, they should just go out and hire a Roger Clemens. Great, thanks. Why didn’t we think of that?

But there is a deeper problem with Blue Ocean Strategy. Two of them actually.

The first is that Kim and Mauborgne don’t ever see the underlying cultural trend that creates up the ocean. The GM opportunity is driven by an American individualism that demanded that people have distinctive cars. The megaplex trend represents a fragmentation of consumer taste and preference (perhaps a first hint of Anderson’s "long tail"). If the corporation really wants access to blue oceans, one of the things that it needs to do is to monitor trends with new acuity. Kim and Mauborne do not see this.

Second, there is a DIY opportunity here. Some of the corporations have opened up blue oceans because they helped to create blue planets. Nike discovered the fitness trend early, and made it an American pasttime. Starbucks created a new category of public space, (aka, the "third place"). Coca-Cola helped to invent Christmas. Pepsi helped to create youth culture. Snapple helped to invent the 1990s.

The "blue planet strategy" are not so much about discovering empty spaces. It’s about something more pro active, creative and hand’s on. It’s not a matter of shifting assumptions and changing frames. It’s about making something new (or newish).

Naturally, comporate acts of invention have to correspond to something in the culture. Consumers have to be able to grasp the "third space" concept, and they have, at some level, to need to want it. So there is an element of discovery. But finally, this is an act of cultural creation that takes the considerable intelligence, deep pockets and vast retail resources of a Howard Schultz.

Talk about ownership. Corporations that merely discover new oceans may "own" these oceans till the rest of the world comes piling in. But corporation that create new planets, this is a deeper ownership. After all, the corporation owns the blue prints, not just the phenomenon. They get the blue planet "down to the ground." They invented it.

Naturally, this is not the sort of thing to which the corporation takes easily. Blue planet creation would take a room full of cultural engineers, a certain amount of patience, and a willingness to get out of the discovery game into the creation one.

The corporate world can engage in acts of cultural invention. And by this means they can create blue planets. (The good news is that the blue oceans come attached.) But there is an "entry cost" here. They are going to have to stop listening to French intellectuals.

References

Kim, W. Chan and Renee Mauborgne. 2005. Blue Ocean Strategy: How to create uncontested market space and make the competition irrelevant. Boston: Harvard Business School Press.

13 thoughts on “Not Blue Oceans, Blue Planets!”

Hopefully this doesn’t go too far off topic, but the whole “Blue Ocean Strategy” thing seems to be pretty much standard for books lately. At first, I thought it was me… these authors have contracts, bring in more for talking in an hour than I do in a year, and have legions of business people repeating every word they say… I couldn’t, initially, accept the fact that such attention would be entirely undeserving, and so assumed that their insight must be so profound that it was beyond my comprehension. But the more I read about it, the more I realized that no… it wasn’t me. These books leave me unsatisfied because not because I don’t grasp the concepts, but because the concepts are so oversimplified that they have lost almost all connection to reality. I don’t need more cute names for self-apparent observations about business.

but aren’t blue oceans just what result from stumbling into a really really successful strategy, recognizing it and then working like hell to keep the competition out?

for instance, sloan’s “a car for every purse” was based on needing to find a way to compete against henry ford’s always cheaper model t.

did sloan know in, say, 1915, that the US car market would be saturated/mature by the mid-1920s, making ford’s commodity car strategy obsolete?

or did it just turn out that sloan was astute enough to see that he had been dealt a winning hand while henry was busy putting ford motor into a 20-year decline not reversed until mcnamara and whiz kids arrived?

One of my curmudgeonly colleagues made this exact point at a panel session on academics and consulting (BTW, the Blue Ocean guys are not famous as scholars). To paraphrase, he pointed out that strategy and econ scholars have a lot to say about innovation.

We know about networks and platforms and appropriability regimes and patent races and complementary assets and lots of interesting little concepts and mechanisms that are relevant to innovation. And what’s the message of the most successful management book? “Innovation is good!”

One wonders what elusive quality makes such banality hit it big in the marketplace–I would not underestimate the skill in selection, packaging, and timing needed to make a success out of such materials. Whatever these guys are doing to make everyone buy their book, it is way too subtle for me to grasp. I don’t think most academics have this knack for branding ideas to get them taken up by managers.

Auto, good questions, I guess that even if you wonder into a Blue Ocean you have to have wit enough to see it for what it is and initiative to make it your own. Thanks, Grant

Steve, hey! and yes, to continue, I guess some people need a whopping great metaphor! And that, as an act of innovation, doesn’t seem like a lot. But I guess these two people have demonstrated how renumerative it can really be. Thanks, Grant

Just a random comment, Grant: Your remark about Starbucks and “third places” reminds me of a wonderful book, Ray Oldenburg’s “The Great Good Place: Cafes, Coffee Shops, Bookstores, Bars, Hair Salons, and Other Hangouts at the Heart of a Community.” Originally written in the late ’80s, I think–pre-Starbucks, at any rate–he discusses the factors that led to the decline of all those wonderful traditional “third places” and created the void that Starbucks has filled very profitably, if not in precisely the same ways.

A little late to the party, but here’s my two cents — the best thing about the book is not some of the examples, but the fact that many companies only look at their competition – what’s so-n-so doing – and never look at he market. I belive it has more to do with no making a mistake. But interesting book, interesting rant about the book. BTW, it appears there are lots of average people out there that just don’t get it (the book).

Ed, thanks, I have ordered it, and this is an interesting proposition, that Starbucks is restoring what was there before, it smacks a little of that “world we have lost” notion with which some people like to imagine an America before the corruption of the marketplace set in. To which I say, America has never not been a market society. But all grist for the mill. Thanks again, Grant

Arnie, this is very interesting, that the corporate culture is now trapped in a “call and response” obsession with its competitors, and that consumers and the innovations that serve are sometimes obscured. I think this may well be what is happening on some marketing teams. No one will ever fault you from shadowing the competition gesture by gesture. And of course this is a good thing, but not when it happens to the exclusion of a bigger picture approach. And if that’s what Blue Oceans brings to the party, then I stand corrected. Thanks, Grant

It seems that the comment about stumbling into a really successful strategy is the one that deserves further consideration. It is easy with the benefit of hindsight to identify a Blue Ocean and to envy those who found their way there. However the point is that having identified that operating in a Blue Ocean is a profitable exercise the task is to see whether potential Blue Oceans can be identified in advance and that potential then exploited. If the theory fits the historical facts then the theory should work again. I was very skeptical at first but then studied the book and identified successes in my own field where others had been successful and even where we had – without at the time realizing fully why. The trick now is to see if that can be replicated.

¥ The book titled “Blue Ocean Strategy” is not helpful to management – don’t buy it and if you already have it dump it

¥ Management can and should be visionary in formulating strategy. But, contrary to the approach of Ocean Strategy, should do so by thinking about market environment shifts, how these could impact customer sets, and whether those customer sets are the ones you wish to serve

¥ Also contrary to Ocean Strategy, production cost reduction is best seen as an operational or resource issue – a barrier to be overcome not an end in itself as a tool of strategy. Resources are easier to acquire than customers. Production methods should match volume to minimize costs

¥ In your strategizing do not take advice on strategy [or any other mission critical function] from management who are not qualified to give advice and do not treat strategy formulation as an exercise in management team compromise – contrary to the Ocean Strategy method

¥ This book should be at the bottom of the list for reading by strategy professionals for Ocean Strategy, Red or Blue, belongs in the Dead Sea!

¥ Harvard University professors should read it for they should wonder what they were thinking allowing Harvard University Press to publish it.

I agree with alot that was said here. There is no on blueprint fits all. What a company needs to be innovative is a team that (mastermind group) that can sit down a strategize on a regular bases. The disney strategy in NLP gives a good outline for the creative process of not only developing but solving problems.

What bothers me the most of all the books that are constantly coming out. It is just a recycling business of the core books and concepts that were developed years ago. That’s why there are very few good movies anymore. Everything has been thought of now lets just keep repackaging it with different wrapping paper and bows.